I am Forbes' Opinion Editor. I am a Senior Fellow at the Manhattan Institute for Policy Research, and the author of How Medicaid Fails the Poor (Encounter, 2013). In 2012, I served as a health care policy advisor to Mitt Romney. To contact me, click here. To receive a weekly e-mail digest of articles from The Apothecary, sign up here, or you can subscribe to The Apothecary’s RSS feed or my Twitter feed. In addition to my Forbes blog, I write on health care, fiscal matters, finance, and other policy issues for National Review. My work has also appeared in National Affairs, USA Today, The Atlantic, and other publications. I've appeared on television, including on MSNBC, CNBC, HBO, Fox News, and Fox Business. For an archive of my writing prior to February 2011, please visit avikroy.org. Professionally, I'm the founder of Roy Healthcare Research, an investment and policy research firm. In this role, I serve as a paid advisor to health care investors and industry stakeholders. Previously, I worked as an analyst and portfolio manager at J.P. Morgan, Bain Capital, and other firms.

6/03/2011 @ 12:04PM4,438 views

Obama's Top Lawyer: If You Don't Like The Individual Mandate, Earn Less Income

Acting Solicitor General Neal Katyal. Image by Center for American Progress via Flickr.

Philip Klein of the Washington Examinerhas been following some of the oral arguments in the constitutional challenges of Obamacare’s individual mandate, which requires all citizens to buy health insurance. Over at the U.S. Court of Appeals for the Sixth Circuit in Cincinnati, Neal Kumar Katyal, the acting Solicitor General, was charged with defending the law. (Generally speaking, the job of the Solicitor General is to represent the federal government in Supreme Court cases.)

Katyal, when asked about the individual mandate, pointed out that the mandate “only kicks in after people have earned a minimum amount of income,” so what’s the big deal? “Someone doesn’t need to earn that much income.” More from Klein:

During the Sixth Circuit arguments, Judge Jeffrey Sutton, who was nominated by President George W. Bush, asked Kaytal if he could name one Supreme Court case which considered the same question as the one posed by the mandate, in which Congress used the Commerce Clause of the U.S. Constitution as a tool to compel action.

Kaytal conceded that the Supreme Court had “never been confronted directly” with the question, but cited the Heart of Atlanta Motel case as a relevant example. In that landmark 1964 civil rights case, the Court ruled that Congress could use its Commerce Clause power to bar discrimination by private businesses such as hotels and restaurants.

“They’re in the business,” Sutton pushed back. “They’re told if you’re going to be in the business, this is what you have to do. In response to that law, they could have said, ‘We now exit the business.’ Individuals don’t have that option.”

Kaytal responded by noting that the there’s a provision in the health care law that allows people to avoid the mandate.

“If we’re going to play that game, I think that game can be played here as well, because after all, the minimum coverage provision only kicks in after people have earned a minimum amount of income,” Kaytal said. “So it’s a penalty on earning a certain amount of income and self insuring. It’s not just on self insuring on its own. So I guess one could say, just as the restaurant owner could depart the market in Heart of Atlanta Motel, someone doesn’t need to earn that much income. I think both are kind of fanciful and I think get at…”

Sutton interjected, “That wasn’t in a single speech given in Congress about this…the idea that the solution if you don’t like it is make a little less money.”

Katyal is more right than he knows. The mandate, combined with Obamacare’s exchange subsidies, will create profound disincentives for individuals to make more money; i.e., become more economically productive. This will crimp tax revenues and slow economic growth, leading to higher unemployment and larger budget deficits. All for a policy that will only exacerbate the free-rider problem.

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Avik Roy is dead on . . . “The mandate, combined with Obamacare’s exchange subsidies, will create profound disincentives for individuals to make more money; i.e., become more economically productive.” At some point, one decides to kick back and enjoy life a little more, rather than facing the pressure of business and all its demands — for the purpose of subsidizing someone else who is kicking back and enjoying life.

I think all my years of education have all gone to hell in a hand basket. Why would someone in government say something like this. But then again I guess I am smarter than he is because I have been getting this done for six months now. Bills will be paid off before 2014 and the absolute maximum will be going into my 401K and IRA and I will be consulting a financial advisor to see how I can make sure that the government gets as close to nothing as I can possibly give it. Before and after retirement.

You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official.